Vernon residents and businesses could soon see an increase in their utility bills under a proposed tax measure that could go before voters in April.

Business owners filled city hall chambers Tuesday to hear more about Measure Q, which if passed would increase the Utility User Tax (UUT) from 1 percent to 6 percent. The city council is expected to call for the measure to be placed on the April 11, 2017 election ballot during the January 10 council meeting.

“Business owners don’t have a vote but it’s important to educate them because they will be the ones affected by it,” explained City Administrator Carlos Fandino, quickly claiming the measure is not a revenue-generating measure but rather a good governance decision.

For years, Vernon has sought to shore up its budget deficits by transferring funds from the city’s profitable Gas and Electric Department to its general fund, an amount that reached $9 million in each of the last two years.

The practice recently prompted the credit rating company Moody’s Investor Service to downgrade the city’s rating to a negative outlook, Fandino said. The State of California discourages such transactions because it is viewed as a hidden tax.

To offset the increase, the city is prepared to offer electric utility customers a 5 percent bill credit equivalent to the utility tax increase, which would be covered by the elimination of the operating transfer.

All other utility customers, however, including water, gas, fiber optics and phone, will still see their bills go up by 6 percent.

Under the proposed rate increase, a moderate sized business should expect their water bills to go up $550. Residents on the other hand will see less than a $2 hike in fees.

If passed, Measure Q is expected to generate a net gain of $1 million, says Fandino, who says the city is simply “moving dollars from one bucket to the other.”

“It is still an increase,” says Peter Corselli, vice president of U.S. Growers Cold Storage, one of the city’s largest businesses.

“The cost of doing business in the city goes up,” added Henry Haskell, chief executive officer and president of Square-H Brands, Inc. “This is an increase on the backs of industry.”

Corselli told EGP his large business would see one of the highest jumps in the city, explaining that at $3 million a year, utility costs are his business’ second largest operating expense.

With just 300 residents in a city with over 1,800 businesses, Vernon prides itself for being business-friendly, often boasting that its utility rates are lower than those of neighboring utility companies.

The city has not raised gas prices since the city’s inception, according to Fandino.

Dave Gardena of Baker Commodities, however, told EGP rates have been going up for years and he does not understand why the city would increase electric rates only to credit it back.

“The revenue is still coming from utilities,” he said “It’s just a horse with a different color.”

When asked how long the 5 percent bill credit would be offered, Fandino said that answer would be determined by the results of the city’s yearly rate analysis.

Why does the city always look to increase utility rates when it needs to fill in the budget, one business owner asked? City Finance Director Bill Fox responded that Vernon is unique and its small population prevents it from generating revenue from other sources, such as taxes or local government returns that are calculated based on the size of a city’s residential population.

“When you have 300 residents you don’t get much of a share,” he said.

After the presentation, Haskell told EGP he’s now convinced that the increase is needed.

“I feel good about it,” he said. “I don’t see it as an increase; the reasons he talked about were reasonable.”

According to the city, business owners and residents will have the opportunity to file arguments for or against the measure next year, and a public examination period will be held before it goes before the voters.

Concerned that the corruption scandals in some Southeast Los Angeles County areas might taint their own reputations, cities in the region have distanced themselves from one another and for the most part chosen to go it alone, strictly focusing on what goes on within their borders.

That changed last week when area leaders and residents came together to highlight their strengths and to begin to construct a new narrative for the region, one which they hope will lead to greater public and private investment to create more jobs, better schools and bring other resources.

“Regionalization allows our community to work together to leverage funds,” pointed out Sen. Ricardo Lara (D-Bell Gardens) during the discussion on communities located along the SR-710 Corridor.

“It allows us to be more influential,” Lara emphasized.

The Oct. 27 “Summit of Possibilities: People, Community and Progress” was hosted by the Pat Brown Institute and the California Community Foundation and focused on the regional potential of the southeast portion of Los Angeles County, including Commerce, Cudahy, Bell, Bellflower, Bell Gardens, Downey, Huntington Park, Lynwood, Maywood, Paramount, South Gate and Vernon.

Sara Zapata-Mijares, a local businesswoman, brings up the issue of health during a summit on communities located along the SR-710 Corridor.

The cities are densely populated and home to a blue-collar workforce surrounded by industry, described opening speaker, Christopher Thornberg, founder of Beacon Economics.

Of the 750,000 people who call the area home, nearly 90 percent are Hispanic, according to the data from Beacon Economics, which also showed that a large number of the residents are fairly young, low-income and have not completed high school.

For most in the room, the information came as no surprise.

“If you lived in the area you already knew this,” said Mark Lopez, executive director of East Yard Communities For Environmental Justice.

A majority of the housing stock is still single-family homes, Thornberg said, suggesting that the cities should invest in building more multi-family housing units to accommodate the Southeast’s growing population.

“This place is ripe for high density, transportation-oriented communities,” Thornberg said. “Given the size of population…single family [housing] is not appropriate.”

It was a suggestion that did not sit well with some of the residents in the audience.

“How can you build when you don’t have space,” Mary Johnson of South Gate asked.

Another resident wanted to know if transforming the area into a technology hub is feasible?

Thornberg suggested cities would be better served by focusing their energies on ensuring existing businesses, especially the large number of manufacturing companies still operating in the region, succeed.

The region has some of the worst air pollution in the state but air quality could be improved and jobs created through better use of the Los Angeles River and pushing more of the goods movement on to the underutilized Alameda Corridor, the economist told Summit participants.

For Bell Gardens and Commerce, Thornberg said continued investment in the casinos in those cities is key to increasing revenue and jobs.

Cities must revisit their general plans, incentivize small builders and unite to compete for grants and businesses, Thornberg advised.

“If you get together you have clout,” he emphasized.

Every presenter acknowledged the event as a very important start to creating a new identify for the southeast region.

Assembly Speaker Anthony Rendon of Maywood echoed that the southeast cities he represents are all densely populated, have high rates of poverty and lack resources such as community colleges, parks, courthouses and access to light rail transportation.

Still, he says he believes a “renaissance of the southeast” is on the horizon.

Many of the panelists said they recognize the answer to the region’s woes is greater investment in the next generation and incentivizing them to stay or return to their community.

“Our [communities] should not be places our folks have to leave,” said Lopez. “We need to look to the future, at retaining residents not displacing them.”

Access to high quality education is the key to retaining local talent, said Nadia Diaz Funn of Alliance for a Better Community.

She noted that 75 percent of the students from the 8 area high schools who attend Cal State LA are not proficient in math or English, and only 45 percent of those who attend graduate within 6 years.

“It has to begin at the schools that are serving our children,” Funn said.

Sen. Lara suggested it might take breaking up the Los Angeles Unified School District to make sure southeast area students aren’t neglected.

Currently, Cal State LA guarantees admission to students attending LA Unified schools in East Los Angeles who complete the Go East LA pathways program, Dunn pointed out, adding, “Where is the Southeast’s promise?”

It will take coordination, organizing and residents and elected officials demanding changes to make anything happen, panelists acknowledged.

Nonprofits and philanthropy must also be part of the conversation, panelists agreed.

“It was philanthropy that brought us together,” pointed out Dr. Juan Benitez of the Cal State Long Beach Center for Community Engagement.

“We have identified the southeast region as an area we want to focus on and provide resources,” responded Belen Vargas of the Weingart Foundation, which provides grants and other support to nonprofit groups.

Rendon, however, sharing his own experience in the nonprofit sector, expressed frustration that many companies believe the only way to help Latinos is to provide services in East Los Angeles and Boyle Heights.

With part-time city council members and mayors, it’s often “overcompensated” city managers and administrators who act as the default policy makers, said Benitez. Ultimately, decisions are made through policies, she emphasized. The highly publicized corruption scandals that came out of Bell, Maywood and Vernon revolved around overpaid city administrators.

East Yard’s Lopez says the problem of political corruption needs to be part of the conversation. Holding elected officials accountable after the election is vital, but it will only happen with good community organizing and a clear vision, he said.

“We need baselines or else how will we know we achieved [anything],” Benitez said.

Speaker after speaker said the conversation at the Summit just touched the surface of the Southeast region’s needs, assets and potential power.

“We are all the southeast,” said Lara. “This cannot be the last time we meet, this has to be the new norm.”

The Board of Supervisors called Tuesday for studies of the long-term health effects of the massive Aliso Canyon gas leak and lead contamination from the now-shuttered Exide battery-recycling plant.

Supervisor Michael Antonovich recommended the study related to the natural gas leak that began Oct. 23 at the Southern California Gas Co. storage facility and was shut down 16 weeks later, on Feb. 11.

Supervisor Hilda Solis asked that Antonovich’s motion be expanded to include a similar study for the neighborhoods surrounding the Exide plant in Vernon.

The board’s vote was unanimous in asking staffers to work with the South Coast Air Quality Management District to develop a study.

A SoCalGas spokesman said the utility has agreed to spend up to $400,000 to fund the Aliso Canyon study but is waiting for AQMD officials to propose a plan.

Thousands of residents were displaced from their Porter Ranch homes due to the gas leak. Once the well was sealed and residents returned, some continued to complain of headaches, respiratory and skin irritation.

County health officials reported surface dust in many homes contained “low levels of metal contaminants” consistent with those found in well-drilling fluid. They suggested that the contaminants could be the source of symptoms but said the metals did not pose long-term health risks.

The utility stepped in to clean roughly 1,700 homes of those metals.

Tuesday, some residents told the board they are still suffering and the interim director of the Department of Public Health reminded the supervisors that the “gas leak was unprecedented in the history of this country.”

In the case of the Exide Technologies battery-recycling plant, soils tests in surrounding communities have found significant levels of lead contamination.

State officials have set aside $176.6 million in funding for environmental testing and cleanup work in neighborhoods within a 1.7-mile radius of the closed plant.

The facility permanently closed in March 2015 after years of failing to meet state standards for operating the plant.

After the board meeting, Solis hailed Gov. Jerry Brown’s signing of Assembly Bill 2153, which charges a fee on lead-acid car batteries to help fund clean up contaminated areas.

“We celebrate a victory for communities surrounding the Exide and Quemetco facilities,” Solis said. “AB 2153 will provide much needed clean-up of lead-contaminated soil from thousands of homes surrounding these facilities.”

The commission approved a $55,000 fine against Commerce Mayor Pro Tem Tina Baca Del Rio, who initially faced one of the largest penalties ever issued by the FPPC over allegations she had illegally transferred campaign funds into her personal bank account, used a campaign debit card to pay for a kitchen remodel and had failed to timely file and properly disclose contributions. Under the agreement, $15,000 of the fine must be paid out of her own pocket, the remainder can be paid using campaign funds and donations.

The commission also approved a $15,500 penalty against Mayor Ivan Altamirano. As EGP detailed in separate story published today, Altamirano is accused of violating conflict of interest and campaign filing laws, including failing to file and properly disclose financial activity on pre-election campaign statements, late filing of 24-hour contribution reports and for voting on a matter the FFPC concluded he had a financial interest in.

Commerce Mayor Ivan Altamirano, pictured above, at a city event earlier this year, has agreed to pay a $15,500 fine levied by the state’s Fair Political Practices Commission. (City of Commerce)

The mayor is accused of using his position to get his sister appointed to the city’s planning commission and to get approval for the installation of a stop sign within 150 feet of his rental property.

The penalty amounts approved by the Commission are the result of negotiations between FPPC Enforcement Division officials and the Commerce elected officials. The recommendation by enforcement officials did not sit well with Commerce residents who asked commissioners to reject the settlements.

“I’m asking that you be a lot more firm,” said Richard Hernandez, a Commerce resident who traveled to Sacramento for the hearing. “Make this case an example, not just for Commerce but all the other cities, show them that you’re not going to show any type of tolerance for their violations.”

Hernandez added that other elected officials are following her, citing Altamirano’s troubles as an example. He told the Commission that Commerce residents had been harmed and deserved justice.

In a 500-page complaint against Baca Del Rio, the councilwoman was accused of illegally transferring $8,000 in campaign funds to her personal bank account and in a separate transaction using a campaign fund debit card to pay for a kitchen remodel. Baca Del Rio claimed the transferred funds were reimbursement for a loan she had made to her campaign committee.

According to the FPPC’s Enforcement Division, however, there is no evidence she ever made such a loan.

Baca Del Rio was first elected to the Commerce City Council in 2005, but recalled in November 2008 only to be reelected a year later. She was most recently reelected in March 2013

Altamirano was appointed to the city council in March 2012 to fill the seat left vacant by former Councilman Robert Fierro who resigned after pleading guilty to a felony conspiracy charge. Altamirano was elected for the first time in March 2013.

The 5-member commission heavily discussed Baca Del Rio’s reduced fine during a meeting in August -that had been negotiated that same say – but voted 2-2 to hold the matter over until the full settlement agreement was in writing and available for the Commission to review. Commissioner Eric Casher, who ultimately voted in favor of the settlement, was not present at the previous meeting to cast his vote.

At the time, citing Baca Del Rio’s past problems and delayed response to the current action against her, the commissioners strongly stated they wanted to see all Baca Del Rio’s stipulations in writing before voting, adding they were reserving their right to reject the settlement agreement if not satisfied by its final form.

Today, Commissioner Maria Audero cast the lone vote against the settlement, saying Baca Del Rio had a history of violating the rules and not reporting contributions, noting that although the Commerce councilwoman was fined in 2011 for many of the same violations, within months of stipulating “she would not do it again” she was again in violation. Audero said she supported issuing a more punitive fine based on her belief that Baca Del Rio had an “intent to disregard” the law.

Commerce resident Charles Calderon also spoke during the meeting, telling commissioners he was disappointed by their decision to approved the reduced penalty for Baca Del Rio, despite her having been fined for similar infractions in the past.

While both Hernandez and Calderon spoke against reduced fines for either of the elected officials, most of their criticism was directed at Baca Del Rio.

According to Calderon’s testimony, a number of residents are collecting signatures to hand over to Los Angeles County District Attorney Jackie Lacey asking that her office open an investigation into what he called Baca Del Rio’s abuse of power as an elected official, and her continuously violating campaign and conflict of interest laws.

Calderon said the ethics and campaign violations by the two sitting council members have harmed Commerce’s public image, claiming Commerce is now being bundled up with Southeast cities that have had a history of scandals involving politicians accused of corruption.

“Now we’re being compared to the cities of Bell and Vernon.” he told commissioners.

Updated: 10/04/16:Clarifies that Councilwoman Tina Baca Del Rio claimed the transfer of funds was repayment for a loan she made to her campaign, and to not to pay for a kitchen remodel as stated in an earlier version of this story. According to Baca Del Rio, it was she who brought her husband’s use of a campaign debit card to pay for services related to the personal kitchen remodel to the attention of the FPPC.

Businesses and residents of Vernon will begin to see an increase in their water bill now that the city has raised rates.
Staff estimates the new rates, which take effect today, will increase overall by 6.53 percent.

Derek Wieske, Vernon’s director of public works, water and development services, told EGP the increase was due in part to the increasing costs in materials, labor and pass through rate increases from the Central Basin Municipal Water District and the Water Replenishment District of Southern California.

“As a water enterprise fund we want to be able to recapture our costs, otherwise our fund will go into deficit,” explained Wieske.
Customers currently pay three separate charges based on the size of their meter, volume of water actually consumed and square footage of the property.

According to a city staff report, the rate structure was “designed to ensure that each customer is charged for only the cost of providing services to that customers.”

For a business with a 4-inch meter and a 50,000 square foot manufacturing operation using 5,500 hundred cubic feet (HCF) of water, the monthly rate would increase nearly $1,500 from $10,447 to $11,900. In another example, a customer with a 2-inch meter and 50,000 square foot manufacturing operation using 200 HCF of water, the monthly charge would increase from $609 to $649.

A Vernon employee checks city water pipes. (citu

“It’s a little tricky because we’re in an industrial city so [water usage] depends on the type of business,” Wieske said.

“Our rates are tailored for business users,” he added.

Wieske assures that despite the increase, rates will still be among the lowest when compared to neighboring industrial cities.

Many water customers use a relatively small amount of water on site, but rely heavily on the constant availability of pressurized water for fire safety purposes. In those cases, the square footage charge reflects the cost of operating and maintaining the infrastructure to allow constant water availability to customers, according to the staff report. Some of the heaviest water users are food processors and textile dyeing businesses, while the water use by residents are a “drop in the bucket,” says Wieske.

“We have some businesses that use more water than all the residential properties combined,” he said.

The rate adjustment was also needed to pay for much-needed capital improvement projects, some of which are already included in the city’s budget. But funding is still needed for other projects, like the building of two water wells estimated to cost up to $3 million each.

To avoid going back to the city council every year, the new rate schedule also includes a stipulation that between now and January 2021, the city can adjust rates based on pass through from water districts. Central Basin approved a rate increase last month, while the Replenishment District increased rates last spring.

Wieske told EGP businesses are doing their part to conserve water, especially while the state is experiencing a drought. “We encourage conservation,” said Wieske.

“We’re not trying to generate profits, were just trying to recapture costs while maximizing services.”

Vernon’s city council approved the water rate adjustment Aug. 16 following a public hearing. The last time the city increased its water rate was in March 2015.

A fire damaged ventilation ducting at a commercial building in Vernon Wednesday, but no one was hurt.

Firefighters sent to the 2400 block of East 25th Street about 6:15 a.m. determined that the fire had not affected the building and was limited to the ductwork, the Los Angeles Fire Department reported.

Hazardous materials teams from the LAFD and the Vernon Fire Department were sent to the scene as a precaution because of possible lead hazards.

A 29-year-old man suspected of causing a fatal accident in Vernon and fleeing the scene was arrested in Alabama and sent back to California to face charges, authorities said Friday.

Guillermo Ortiz was arrested in Demopolis, Alabama, July 2 when police stopped him for an expired registration on his big rig, Vernon police Sgt. Brandon Gray said.

“During the course of their investigation, Demopolis Police Department officers learned of an outstanding arrest warrant for Ortiz as a result of his involvement in a fatal hit and run traffic collision in the City of Vernon,” Gray said.

Vernon police detectives brought Ortiz back to Southern California on July 8 and booked him into the Huntington Park jail, the sergeant said.

Ortiz was arraigned on July 12 and pled not guilty to charges of gross vehicular manslaughter while intoxicated, DUI, fleeing the scene of a fatal traffic collision and fleeing the scene of a non-injury traffic collision, Gray said.

Ortiz was being held on $235,000 bail in the North County Correctional Facility in Castaic, with a return to a Norwalk court scheduled for July 26, according to inmate booking records.

Oritz is accused of running a red light while westbound on 37th Street on Saturday, April 30, and colliding with a pickup truck with two men inside that was northbound on Santa Fe Avenue, Gray said.

The Chevrolet Silverado pickup truck became lodged underneath the big rig’s trailer. Ortiz is accused of unhooking the trailer from his cab and driving away, Gray said.

The driver of the pickup suffered moderate injuries. The passenger, 28-year-old Armando Murillo, of Pacoima, was pronounced dead at the scene, Gray said.

The Board of Supervisors declared a local emergency Tuesday in the wake of last week’s explosive fire at a Maywood warehouse, saying hazardous levels of magnesium were found in the fire ash.

Supervisor Hilda Solis recommended the declaration and proposed reaching out to Gov. Jerry Brown to ask that he declare a state emergency. Both motions were unanimously approved.

“Over 300 residents were impacted,” Solis said. “Many were not able to go back to their homes” because of magnesium levels.

It took three days for the blaze, which broke out June 14, to be fully extinguished.
Families living on the south side of 52nd Street were cleared to go back into their homes last Wednesday evening, but those on the other side of the street, closer to the fire, sheltered at the local YMCA.

The Maywood YMCA doesn’t have air-conditioning, so when temperatures soared this weekend, county officials helped residents move into area hotels.

On Friday, the South Coast Air Quality Management District announced that samples from areas around the fire scene had been tested, and a preliminary analysis “showed ambient metal concentrations did not exceed short-term, health-based thresholds.

“The information … only pertains to the results from preliminary metals sampling near the incident,” the SCAQMD said in a statement.

“Additional laboratory analysis is still underway for other pollutants and from other sampling locations. Updates will be provided as results become available.”

The three-alarm fire — reported at 2:30 a.m. June 14 — in the 3500 block of Fruitland Avenue ripped through a pair of commercial buildings early the first morning, sparking a series of strong explosions and sending a thick plume of noxious smoke over the region.

Firefighters found flames shooting through the roofs of two structures, a warehouse serving Gemini Plastic Enterprises and a metal-recycling plant.

Crews began pouring water on the flames, but the oxygen from the water created a chemical reaction with the burning magnesium, one of the metals being stored at the facility and awaiting recycling, producing what one fire official described as “fireballs” and setting off strong explosions.

In addition to magnesium, other metals such as coppers, zinc and lead were present at the metal-recycling plant, along with chemicals and propane, according to County Fire Chief Daryl Osby.

Crews were able to prevent the blaze from spreading from the two commercial structures that were destroyed to other businesses and nearby homes.

Da Xiong Pan, the owner of the recycling facility, was recently charged with multiple felonies for alleged improper storage and disposal of hazardous materials at the site, according to media reports, which also stated that Pan, who owns Panda International Trading Co. at 3570 Fruitland Ave., pleaded not guilty to five felony charges last month.

When lunch hour hits in Vernon, the more than 50,000 men and women who report to work at one of the city’s 1,800 businesses have only about a dozen or so eateries to choose from, however, a new development under construction could soon broaden their options.

Located on the northwest border of Vernon, the 15,000-square-foot project on Alameda and 25th Street has already signed up Jersey Mike’s Subs as a tenant.

“We noticed there was a lack of high quality retail options in the industrial city and wanted to fill that void,” explained Jessica Pisula, director of marketing for the project’s developer, Dedeaux Properties.

The development is expected to open by Labor Day, Pisula told EGP, and could bring in 10 new retailers – nearly doubling the city’s current restaurant options.

The developer bought the property from the Alameda Corridor Transportation Authority and in 2015 the city rezoned it for retail use.

Dedeaux Properties has a long history of developing projects within the city of Vernon and other industrial cities like neighboring Commerce and that experience led to their decision to develop a retail project in Vernon, Pisula said.

A new retail development located on the intersection of 25th and Alameda Street will bring new lunch options to Vernon. (EGP photo by Nancy Martinez)

“When we meet our Vernon clients for lunch, we’re very limited” as to where to go, she said, adding she hopes the development will bring a variety of dining options.

With over 21,000 employees in a one-mile radius and over 280,000 employees within 3-miles, the location is appealing to potential tenants, according to Daniel Firtel, managing director of the commercial real estate firm Argent Retail Advisors, who added they are already in negotiations with several restaurants,

“There are a lot of workers but nowhere to eat,” he noted. “There is definitely a need.”

Founded as a city focused on industry rather than residential, there are not many lots in Vernon zoned for retail use. Instead, much of the land is used for large-scale industry like food processors, and manufacturers of fashion apparel, furniture and electronics, as wells as paper product producers and business logistic companies. Farmer John, BCBG Maxazria, Gaviña Gourmet Coffee and Tapatio Hot Sauce are just a few of the well-known companies that call Vernon home.

Mayor William “Bill” Davis told EGP that the new development is a prime example of Vernon’s ability to attract new industrial development, grow its retail presence and retain businesses.

“We have long argued that Vernon is an ideal location for diverse business interests,” Davis said.

The corner lot borders the city of Los Angeles and is highly visible to commuters. It is estimated that over 44,000 cars drive past the property everyday.